Hong Kong exports tipped to fall 4 per cent in 2016 as gloom deepens
Trade Development Council cuts forecast and says downturn across border, waning US growth, and deflationary pressure in Europe and Japan will take toll
Hong Kong’s Trade Development Council (TDC) has cut its forecast for the city’s exports this year from flat to a 4 per cent decline, a prospect that would put the figures on a par with the depth of the global financial crisis in 2009.
The cut came after exports performed worse than expected between January and April, shrinking 5.6 per cent compared with a year earlier.
TDC director of research Nicholas Kwan Ka-ming said the outlook was clouded by a worsening economic downturn across the border, waning growth in the United States, and deflationary pressure in the European Union and Japan.
“It is one of the worst since 2009,” Kwan said.
He said Hong Kong’s exports could decline by 3 to 4 per cent in each of the third and fourth quarters this year.
“This is already a rather positive forecast, given the poor performances in the previous few months. We hope exports will not slump as much as they did in the first quarter.”
Developed economies like the US have revived for seven years since 2009. I don’t see much room for economic recovery in the future
He said the city faced a choppy trade environment – sluggish global demand and fears of a further slowdown of the Chinese economy had contributed to the export slump.
Daniel Poon Wing-choi, TDC principal economist, said the United Kingdom’s referendum on EU membership was another cause for concern. An exit vote, or Brexit, would likely hurt the EU further by damaging economic and trade relations between the two parties, he said.
Kwan said the UK’s decision would have a long-term impact on economic development, which may not be shown immediately in Hong Kong’s exports in the second half of the year.
Law Ka-chung, analyst of global markets at the Bank of Communications, expected the world economic environment to keep shrinking.
“Developed economies like the US have revived for seven years since 2009. I don’t see much room for economic recovery in the future,” he said. He expected Hong Kong exports to keep decreasing for the rest of the year.
